News that Indian army conducted strikes across the Line of Control (LOC) between India and Pakistan, is on wires. This has pushed USD-INR higher by ~0.6%, equities lower by about 2% from intraday highs. While cross-border firing isn’t rare, attacks across the LOC are. Diplomatic tensions between the two countries have already been high following the attack on an Indian army camp in Uri on 18th September in which 18 Indian soldiers lost their lives and the exchange of words between India and Pakistan in the UN General Assembly recently. In fact, India Read more

The Goods and Services Tax (GST) aims to simplify and unify India’s current indirect tax regime (by removing the complexity of multiple state/central taxes and a multitude of exemptions, and ensuring a seamless flow of input tax credit in the value chain), thus we believe that its implementation will be a game-changer for India. Apart from simplifying the indirect tax structure, the GST should help to create “One” India by eliminating geographical fragmentation. While the government has been trying to implement a GST for the past five-six years, it has never been so close. The constitutional Read more

There is no doubt that India is in a Structural Multi Year Bull Run. One should not be too much worried about Bull Market Corrections as we have seen it happen 22 times at 10% in the last 10 years. In this backdrop, we’d like to summarize the views of various Foreign Investors who now own 25% of Indian Equity Market while Indians poured all their money in non-productive assets such as Gold & Real Estate.

BOFA Merrill remain positive on the Indian markets over next 6 to 9 months and expect an up-turn in consumption over the next 6 months on Read more

In an out of monetary policy review decision, the RBI today lowered the key benchmark repo rate by 25bps to 7.75% with immediate effect. Consequently, the reverse repo rate and marginal standing facility rate are also lowered by 25bps to 6.75% and 8.75% respectively. The cash reserve ratio (CRR) stands unchanged at 4%.

The government of India has revealed the structure of a new think-tank called NITI (National Institution for Transforming India) Aayog (Niti Aayog means Policy Commission in Hindi), which will replace the now dismantled Planning Commission (PC). The key objectives of the new body are as follows,

Unlike the PC, which focused on five-year plans, NITI Aayog will undertake more ad hoc and long-term policy advisory for the central and state governments.

In a world struggling for growth, India stands out. Promising medium-term prospects come from an extremely low base, and a stark improvement in state-level governance. Credit Suisse economists project India to see the fastest USD nominal GDP growth in 2015, with the growth gap between India and the rest of the world expanding.